In a case of first impression regarding whether communications between a non-lawyer patent agent and a client are legally privileged, a split panel of the US Court of Appeals for the Federal Circuit held that a patent-agent privilege is warranted on a limited basis where an agent is engaged in the congressionally endorsed, authorized practice of law. In Re Queen’s University at Kingston, PARTEQ Research and Development, Case No. 2015-145 (Fed. Cir., Mar. 7, 2016) (O’Malley, J) (Reyna, J, dissenting).

The opinion followed the plaintiffs’ petition for mandamus. At the district court, the petitioners withheld documents reflecting communications between the plaintiffs’ employees and the non-lawyer patent agents who prosecuted the patents-in-suit based on an alleged patent-agent privilege. The district court overruled objections to the magistrate’s order granting defendants’ motion to compel production over the alleged privilege, but agreed to stay the discovery order pending a writ of mandamus. Applying Federal Circuit law, the Court found that mandamus was warranted to decide the issue of first impression, which had split the lower courts.

The Federal Circuit first recognized that “Rule 501 of the Federal Rules of Evidence authorizes federal courts to define new privileges by interpreting ‘common law principles.’” Finding that the respondents did not argue that a patent-agent privilege was foreclosed by the US Constitution, any federal statute or any rule prescribed by the Supreme Court of the United States, the Court turned to reason and experience, as directed by Rule 501, in order to determine whether recognizing a privilege was now appropriate. The majority concluded that it was, holding that the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation warranted an independent patent-agent privilege.

The Federal Circuit relied on the Supreme Court’s prior assertion that the preparation and prosecution of patent applications for others constitutes the practice of law. Further, the majority found that Congress had delegated to the commissioner of patents oversight authority concerning lawyers, agents or other persons representing applicants or other parties before the US Patent and Trademark Office (PTO), and that the commissioner had, in fact, allowed both lawyers and agents to practice before the PTO.

In further support, the majority panel cited both the Supreme Court’s recognition of Congress’s delegation of supervisory authority to the commissioner of patents for lawyers and agents alike, and related legislative history acknowledging the practitioners’ equivalent professional rights before the PTO. The majority found that a client has a reasonable expectation that all communications relating to obtaining legal advice on patentability and legal services in preparing a patent application will be kept privileged, and that denying privilege to agents would frustrate Congress’s intent to provide clients a choice between agent and lawyer. As a result, the majority found that a patent-agent privilege is coextensive with the rights Congress affords to patent agents, and serves the same important public interests as the attorney-client privilege.

The Court also noted that the new privilege’s scope is necessarily limited to communications with non-lawyer patent agents when those agents are acting within their authorized practice of law before the PTO. The Court found that the Code of Federal Regulations (CFR) sets forth the acts permitted by non-lawyer agents and helps to define the scope of communications covered under the privilege. For example, communications are due the privilege if made in furtherance of the performance of tasks specifically set forth in the CFR, or “are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before the [PTO] involving a patent application or patent in which the practitioner is authorized to participate.” The Court stressed that it is the burden of the person asserting the privilege to justify its applicability. The Court also cited examples of non-privileged communications, including those with a patent agent who offers an opinion on the validity of another party’s patent in contemplation of litigation or the sale or purchase of a patent, or on infringement.

In dissent, Judge Reyna argued that the public’s need for open discovery outweighed the need for the privilege. The dissent also argued against the new privilege with the following reasoning:

The privilege may adversely affect an agent’s duty of candor.

Agent communications are already routinely protected because of lawyer involvement.

Patent agents and clients are able to destroy written communications through implementation of document-destruction policies.

Determining the scope of the privilege is complicated and uncertain.

Congress and the Supreme Court have recognized a difference between agents and lawyers.

Evidence suggests that Congress did not intend that agents have a privilege.

No state has created an agent-client privilege.

The Judicial Conference Advisory Committee has not recommended creating the privilege.

Lawyers hold the privilege because of their professional status.

The Supreme Court has never held that patent agents practice law; it has merely recognized that the Florida Supreme Court has done so under Florida law.

Congress has never believed that patent agents practice law.

The Federal Circuit remanded the issue to the district court to determine whether the patent-agent privilege applied.